Correlation Between Franklin Real and American Funds
Can any of the company-specific risk be diversified away by investing in both Franklin Real and American Funds at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Franklin Real and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Real Estate and American Funds Europacific, you can compare the effects of market volatilities on Franklin Real and American Funds and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Franklin Real with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and American Funds.
Diversification Opportunities for Franklin Real and American Funds
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and American is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and American Funds Europacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Europ and Franklin Real is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Franklin Real Estate are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Europ has no effect on the direction of Franklin Real i.e., Franklin Real and American Funds go up and down completely randomly.
Pair Corralation between Franklin Real and American Funds
Assuming the 90 days horizon Franklin Real Estate is expected to generate 1.27 times more return on investment than American Funds. However, Franklin Real is 1.27 times more volatile than American Funds Europacific. It trades about 0.21 of its potential returns per unit of risk. American Funds Europacific is currently generating about 0.0 per unit of risk. If you would invest 1,951 in Franklin Real Estate on September 3, 2024 and sell it today you would earn a total of 74.00 from holding Franklin Real Estate or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Real Estate vs. American Funds Europacific
Performance |
| Timeline |
| Franklin Real Estate |
| American Funds Europ |
Franklin Real and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and American Funds
The main advantage of trading using opposite Franklin Real and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, American Funds can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in American Funds will offset losses from the drop in American Funds' long position.| Franklin Real vs. Vanguard Reit Index | Franklin Real vs. Vanguard Reit Index | Franklin Real vs. Vanguard Reit Index | Franklin Real vs. Cohen Steers Real |
| American Funds vs. Franklin Real Estate | American Funds vs. Us Real Estate | American Funds vs. Tiaa Cref Real Estate | American Funds vs. Prudential Real Estate |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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